IShares Core U.S. Aggregate Bond ETF's AGG conservative portfolio and razor-thin expense ratio make it a compelling option. The fund earns a Morningstar Analyst Rating of Gold. 

The fund tracks the Bloomberg U.S. Aggregate Bond Index, which includes taxable, investment-grade U.S. bonds with at least one year until maturity. Issuing activity in that market, which is dominated by U.S. Treasuries, will dictate the portfolio's composition. Market-value-weighting emphasizes the most liquid issues by harnessing the market's collective wisdom on the relative value of each bond. 

The U.S. investment-grade bond market is highly efficient and liquid, making it difficult for active managers to gain a durable edge and recoup their fees without also taking greater risk than this portfolio. Active managers therefore allocate a higher percentage of assets to lower-quality bonds than this fund and performance of those credit-risky bonds help steer category-relative performance. About 73% of the fund's assets carried a AAA credit rating, 18 percentage points greater than the category average, as of March 2023. Some peers also hold a small allocation to high-yield bonds.

Since credit risk is muted, interest-rate risk will be the primary driver of this fund’s performance. Its average effective duration was 6.4 years as of March 2023, almost four months longer than the Morningstar Category average. This makes the fund more sensitive to interest-rate movements than some peers.

Since the fund's 2003 inception, it beat its average peer by 21 basis points annualized in large part thanks to its 0.03% fee. Performance patterns have been predictable in different market environments. It performs better than peers when credit spreads widen, and worse than peers when they narrow, thanks to its minimal credit risk. Despite its currently higher average effective duration, the fund has largely mirrored the category average duration for much of its life, leading to similar performance to the category norm when interest rates fluctuate.

Analyst Rating

Full U.S. investment-grade bond coverage for a low fee.

Associate Analyst

Zachary Evens

The strategy effectively captures the full taxable, U.S. investment-grade bond market. Market-value-weighting emphasizes the largest and most liquid issues. It earns an Above Average Process Pillar rating.

The portfolio managers employ representative sampling to track the Bloomberg U.S. Aggregate Bond Index.

Above Average

Process

BlackRock boasts a large and experienced team reinforced by sector specialists, support teams, and centralized trading desks, mitigating key-person risk and underpinning an Above Average People rating.

James Mauro and Karen Uyehara were named as lead portfolio managers for this fund since 2012 and 2021, respectively. Mauro joined BlackRock in 2010 from State Street, while Uyehara joined the same year from Western Asset. Uyehara replaced Scott Radell as a lead portfolio manager in June 2021. The team draws support from a broader group of sector specialist portfolio managers and a handful of analysts, as well as distinct trading and index research teams.

The broad supporting cast improves execution and scalability, allowing the team to deliver high-fidelity index tracking at a low cost. Senior members of the team bear the broadest scope of responsibility, as they oversee BlackRock's macro outlook and strategic research. Specialists beneath them focus on day-to-day fund operations, such as processing creation/redemption baskets. BlackRock's risk and quantitative analysis team provides independent oversight.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Core U.S. Aggregate Bond ETF

AGG tracks an index of US investment-grade bonds. The market-weighted index includes Treasuries, agencies, CMBS, ABS and investment-grade corporates.

Vanguard Total Bond Market ETF

November 2023 was the best month for bonds since 1985, suggesting a turning point in the bond market. Vanguard's Total Bond Market Index Fund ETF and iShares Core U.S. Aggregate Bond ETF have similar performance and holdings. The future outlook for the bond market is positive, with potential rate cuts and bond appreciation predicted in 2024.

BND And AGG: Records Broken, A Head-To-Head Comparison, And 2024 Predictions

Neos Enhanced Income Aggregate Bond Etf

‘Tis the season for tax-loss harvesting, and this year presents several opportunities in bonds. Advisors and investors needing to move into a product with similar exposure should consider the NEOS Enhanced Income Aggregate Bond ETF (BNDI).

When Tax-Loss Harvesting Bonds, Don't Overlook BNDI

Vanguard S&P 500 ETF

Vanguard Total Stock Market ETF

The milestone is a testament to investors' appetite for bonds.

Vanguard's Biggest Bond ETF Tops $100 Billion

The prospect of subsiding interest rates has become more pronounced after the recent pause in rate hikes by the Federal Reserve. If that's the case, fixed income investors may want to extract additional income while also getting core bond exposure with the NEOS Enhanced Income Aggregate Bond ETF (BNDI).

Get Additional Income & Core Bonds With BNDI

Stocks aren't the only assets that tend to benefit from a seasonal year-end bounce after Thanksgiving.

Black Friday often kicks off a year-end rally in corporate bonds

Hopes of a conclusion to Federal Reserve interest rate hikes sent bond prices soaring this week. Investors continue to increase their bond allocations in November, capturing yield opportunities as Fed rate risk falls.

Investors Buying Back Into Bonds Shouldn't Overlook BNDI

iShares iBoxx High Yield Corporate Bond ETF

Ishares High Yield Corporate Bond Buywrite Strategy ETF

iShares Ibonds Dec 2032 Term Corporate ETF

iShares Core S&P 500 ETF

Ishares Investment Grade Corporate Bond Buywrite Strategy ETF

iShares MSCI USA Quality Factor ETF

iShares 20+ Year Treasury Bond ETF

iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

The U.S. ETF industry continues to evolve. In the first 10 months of 2023, fixed income ETFs gathered more than 40% share of the net inflows, despite representing just 20% share of the market.

Recapping BlackRock's Strong Fixed Income Flows

AGNC Investment

AGNC Investment Corp - FXDFR PRF PERPETUAL USD 25 - Ser D 1/1000th int

AGNC Investment Corp. Deposit Shs Repr 1/1000th Cum Conv Red Pfd Registered Shs Series C

Ashford Hospitality Trust

American Homes 4 Rent

American Tower

Angel Oak Mortgage

Apple Hospitality REIT

Alexandria Real Estate Equities

AvalonBay Communities

Alpine Global Premier Properties Fund

Braemar Hotels & Resorts Inc

Cambria Global Real Estate ETF

Blackstone Mortgage Trust

CBL & Associates Properties

Crown Castle International

City Office REIT

Camden Property

CareTrust REIT

CubeSmart

Digital Realty Trust

Following the best week of the year, U.S. equity markets were mixed this week as interest rates rebounded from the prior week's plunge after Fed officials pushed back on market optimism. Posting gains in nine out of ten sessions since dipping into "correction territory" at the end of October, the S&P 500 gained 1.4% on the week, but Mid-Caps and Small-Caps posted declines. Following their best week since 2020, REITs took a step back this week as upward pressure on benchmark interest rates offset a solid conclusion to a strong earnings season.

Fed Says 'Not So Fast'

SPDR Bloomberg 1-3 Month T-Bill ETF

iShares 7-10 Year Treasury Bond ETF

iShares iBoxx $ Investment Grade Corporate Bond ETF

iShares National Muni Bond ETF

Invesco QQQ

SPDR S&P 500 ETF Trust

Vanguard Tax-Exempt Bond Index ETF

Trading activity on the Tradeweb European ETF marketplace reached EUR 52.4 billion in October, while the proportion of transactions processed via the AiEX tool was 83%. North America Equities were once again the most heavily-traded ETF category, with EUR 9.5 billion in total notional volume, of which 60% was attributed to ‘buys'. Total consolidated U.S. ETF notional value traded in October amounted to a record USD 71.1 billion, beating the platform's previous best performance in March 2023 by USD 3.8 billion.

Tradeweb Exchange-Traded Funds Update - October 2023

iShares Russell 2000 ETF

Invesco California AMT-Free Municipal Bond ETF

iShares Short Treasury Bond ETF

Investors were net purchasers of fund assets (including those of conventional funds and ETFs) for the third week in a row, injecting a net $14.2 billion for the LSEG Lipper fund-flows week ended Wednesday, November 8. A weaker-than-expected October jobs report, a drop in oil prices and inflation expectations, and rising hopes that the Fed is done hiking interest rates pushed equities to their longest daily winning streak in two years and the 10-year Treasury yield dropped to its lowest level since September. The Dow locked in its longest winning streak since late July, rising for the sixth consecutive trading session, on Monday, November 6.

U.S. Weekly Fund Flows Insight Report: Investors Give A Cold Shoulder To Conventional Funds During The Fund-Flows Week But Embrace Equity And Bond ETFs

Direxion Daily 20+ Year Treasury Bull 3X Shares

Direxion Daily 7-10 Year Treasury Bull 3x Shares

Interest rates have been rising and yields have followed the same path. So traders bullish on bonds have essentially been seeing a repeat of 2022's weakness.

Fed Pause Bringing Some Bulls Back to Bonds

Blackrock Flexible Income ETF

The chief investment officer of fixed income sees a strategic advantage in his actively managed fixed income ETFs.

Why BlackRock's Rick Rieder says investors 'underestimate' active fixed income ETFs

Invesco Nasdaq 100 ETF

iShares 1-3 Year Treasury Bond ETF

Financial Select Sector SPDR Fund

During LSEG Lipper's fund flows week that ended November 1, 2023, investors were overall net purchasers of fund assets for the second week in a row, adding a net $53.3 billion. Exchange-traded equity funds recorded $7.8 billion in weekly net inflows, their fifth straight week of attracting new capital.

U.S. Weekly Fund Flows Insight Report: Equity ETFs Attract $7.8 Billion In Inflows, While Mutual Funds Suffer $6.8 Billion In Outflows

iShares Global Clean Energy ETF

iShares U.S. Home Construction ETF

iShares MSCI Saudi Arabia ETF

SPDR S&P North American Natural Resources ETF

First Trust NASDAQ Clean Edge Green Energy Index Fund

iShares Mortgage Real Estate ETF

Invesco Solar ETF

Global X Uranium ETF

United States Oil Fund LP

SPDR S&P Homebuilders ETF

Hello! This week's ETF Wrap digs into where investors put their money in October, and how November is shaping up in markets after the Federal Reserve's decision on interest rates.

Short-term bonds dominate fixed-income ETF flows again in October — with a single fund getting outsize portion of investors' money

Schwab US TIPS ETF

Schwab High Yield Bond ETF

Vanguard Intermediate-Term Treasury ETF

Vanguard Long-Term Treasury ETF

Hello! This week's ETF Wrap gives you a look at the findings in Charles Schwab's latest annual ETF survey as well as how Thursday's economic data rippled through the bond market.

Millennials seem to dig bond ETFs despite volatile fixed-income market, Charles Schwab finds

Neos Enhanced Income Cash Alternative Etf

Neos S&P 500 High Income Etf

Analysts and economists currently forecast for increased economic slowing heading into next year. Optimizing income from core exposures through enhanced tax efficiency allows for the potential of greater returns capture in risky markets.

Make Your Income Count in Challenging Markets With NEOS

iShares Trust iShares 1-5 Year Investment Grade Corporate Bond ETF

iShares Russell Top 200 Growth ETF

iShares MBS ETF

Utilities Select Sector SPDR Fund

During LSEG Lipper's fund-flows week that ended October 18, 2023, investors were overall net sellers of fund assets for the fourth week in five, removing a net $106.3 billion. Exchange-traded equity funds recorded $2.2 billion in weekly net inflows, the third straight week of attracting new capital.

U.S. Weekly FundFlows Insight Report: Largest Weekly Outflow Since June 11, 2008 - Led By Money Market Funds (-$97.5 Billion)

Rising Treasury yields helped provoke a frenzy of trading in a popular bond exchange-traded fund this week as dip buyers battled with bears on the cusp of a critical threshold for markets.

Popular Treasury ETF sees record-setting trading frenzy as surging yields rattle bond market

Capital Group Core Bond ETF

RiverFront Strategic Income Fund

T Rowe Price US High Yield ETF

Bond investments remain in focus for many advisors given the geopolitical and monetary policy uncertainties. The recent yield on the 10-year Treasury of 5.0% was at levels we have not seen since the Sopranos was on TV.

Chart of the Week: Bonds in Focus

iShares 10-20 Year Treasury Bond ETF

The iShares 20+ Year Treasury Bond ETF continued to decline on Wednesday, dropping to another round of 16-year lows as U.S. Treasurys saw renewed selling.

U.S. Treasury bond rout deepens as popular fixed-income ETFs touch decade-plus lows

SPDR Bloomberg High Yield Bond ETF

Junk bond ETFs fell Thursday after the latest inflation report, but have gains this year on a total return basis

Investors shun high-yield debt ETFs despite gains as broader bond market stumbles

PIMCO Active Bond ETF

Fidelity Total Bond ETF

iShares Core Total USD Bond Market ETF

JPMorgan Core Plus Bond ETF

T Rowe Price Total Return ETF

USAA Core Intermediate-Term Bond ETF

Bond ETFs represent approximately 20% of the industry assets. Yet they have gathered more than 40% share of the net inflows in the first nine months of 2023.

Chart of the Week: Benefits of Active and Passive Bond Funds

iShares MSCI Emerging Markets ETF

JPMorgan Global Select Equity ETF

During LSEG Lipper's fund-flows week that ended October 4, 2023, investors were overall net purchasers of fund assets for the first week in three, adding a net $32.9 billion. The Bloomberg U.S. Aggregate Bond Total Return Index logged its third straight weekly loss. Exchange-traded equity funds recorded $4.7 billion in weekly net inflows, marking the first weekly inflow in three.

U.S. Weekly Fund-Flows Insight Report: Taxable Fixed Income Funds Top Last Week's 2023 Outflow Record

Advisors and investors face a number of challenges in an environment of rising rates and recession risk. Optimizing income across core exposures to meet the challenges ahead could prove advantageous.

Increase Tax-Efficient Income Across Core Exposures With NEOS

The unpredictability of interest rates makes it risky to own fixed income investments that need falling rates to deliver a good total return. AGG dividends correlate well with a trailing 24-month average of the 10-year Treasury yield. Distributions are expected to increase as older low-coupon debt matures out of the portfolio.

News for iShares Core U.S. Aggregate Bond ETF ETF (AGG)